Bitcoin (BTC) continued to fall after Wall Street opened on September 13 as dust settled on unexpectedly high inflation in the United States.
BTC Price Suffers 9% Daily Losses
According to data from Cointelegraph Markets Pro and TradingView, the BTC/USD pair fell below $21,000, down 8.45% on the day.
Bearish trends set in after the release of the US Consumer Price Index (CPI) for August came in 0.2% higher than forecast.
This has raised the likelihood that the Federal Reserve will raise policy rates by 75 or 100 basis points next week, putting pressure on already weak risk asset markets.
Bitcoin was very sensitive to the event, and the decline was nevertheless at $20,800 in the expected support.
The BTC/USD pair also managed to close the last gap created by CME futures over the weekend, which is between $21,300 and $21,500.
“BTC has just crossed the previous volatility threshold that I indicated yesterday and today,” it said confirmed well-known Crypto trader Ed, who predicted these two levels, in a tweet posted after the release of the CPI.
US stocks faced similar woes, with the S&P 500 down 3% and the Nasdaq Composite Index down 4% at the time of writing.
For Jurrien Timmer, director of macroeconomic analysis at asset manager Fidelity Investments, there is no reason to believe there will be a revival of risk assets until the Fed stops raising rates.
Look at the 1994 cycle to understand the current one: Valuations are unlikely to advance until the Fed tightens and the 2-year yield begins to fall. pic.twitter.com/xk6DDYLdzp
—Jurrien Timmer (@TimmerFidelity) September 13, 2022
Look at the 1994 cycle to understand the current cycle: Valuations are unlikely to recover until the Fed tightens and the 2-year yield begins to decline. pic.twitter.com/xk6DDYLdzp — Jurrien Timmer (@TimmerFidelity) September 13, 2022
Currency inflows hit a 10-week high
Meanwhile, volatility led to the largest BTC long position liquidations in a week, which totaled $45 million for September 13 at the time of writing.
Also read: The Fed, the Merge and 22,000 BTC – 5 things to know about Bitcoin this week
Total cryptocurrency liquidations were far higher, at $168 million, according to data from chain monitoring resource Coinglass.
Meanwhile, Analytics platform CryptoQuant showed that the day’s inflow had already reached its highest level since July 1, at 84,000 BTC.
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